1. DEPARTMENT: LAND AFFAIRS Department of Land Affairs Presentation to the Joint Budget Committee on Departmental Expenditure for the Financial Year 2007/08 06 June 2008 Director-General Mr T Gwanya Presentation to the Joint Budget Committee on Departmental Expenditure for the Financial Year 2007/08 06 June 2008 Director-General Mr T Gwanya

2. 2 1.2007/08 Un-audited Financial Performance 2.Under spending 3.Six year Trends Analysis 4.Expenditure Per Economic Classification & Virements 5.Expenditure Analysis Per Programme 6.March Spike 7.Procurement 8.Vacancies 9.Medium Term Budget 10.Medium Term Challenges 11.Risk Management Contents

3. 3 Un-audited Financial Performance for the year ended 31 March 2008 2007/08 R’000 2006/07 R’000 Budget allocation5,93 billion3,73 billion Actual Expenditure5,90 billion3,72 billion Spending as a percentage99,5%99,9% Unspent funds30,8 million4,65 million Unspent funds as a percentage0.5%0.12%

4. 4 Under spending/Overspending:  Under spending of R22 million under the Programme: Land Reform is due to the reclassification of expenditure from Transfers and Subsidies: Households to Land and Subsoil.  Under spending of R5 million under the Programme Auxiliary and Associated Services is due to delays in PPP.

5. 5 Six Years Expenditure Trends 99% 97% 98% 73% 99,9% 99.5%

6. 6 Economic Classification & Virements R94 million shifted was due to vacant posts Economic Classification Adjusted Appropriati on R’000 Shifting of Funds R’000 Virement s R’000 Final Approriation R’000 Actual Expenditure R’000 Under (Over)/ spendin g R’000 Expendit ure as % R’000 Compensation of employees 574 408(94 145)-479 263476 0923 17199.3% Goods and Services 670 0254 939-674 946668 3886 57699.0% Other Current Exp 3 55192 3 6437 336(3 693)201.0% Households3 760 43138 86252 0003 851 2933 829 34521 94899.4% Land & Subsoil849 06236 033(52 000)833 095832 833262100.0% Capital Assets70 79215 219-86 01183 5032 50699.1% Total5 928 269-- 5 897 49730 77299.5%

7. 7 Expenditure Per Programme 2007/08: ProgrammesAdjusted Appropri- ation R’000 Shifting of Funds R’000 Virements R’000 Final Appropriatio n R’000 Actual Expenditure R’000 Under (Over)/ spending R’000 Expenditur e as % R’000 1.Administration433 720(7 166)-426 554424 9941 56099.6% 2.Surveys and Mapping 105 621(7 536)-98 08597 25782899.2% 3.Cadastral Surveys141 352(3 415)-137 937137 61632199.8% 4.Restitution3 577 0959 51652 0003 638 6113 638 465146100.0% 5. Land Reform1 635 6829 789(52 000)1 593 4711 571 07322 39898.6% 6.Spatial Planning and Information 22 206(188) -22 01821 83618299.2% 7.Auxiliary and Associated Services 12 593(1 000)-11 5936 2565 33754.0% Total5 928 269-- 5 897 49730 77299.5%

8. 8 Monthly Expenditure vs Drawings 2007/08 – March Spike

9. 9 Procurement  The Department applies the PFMA, Treasury Regulations, PPPFA and the Supply Chain Management guidelines for its procurement activities.  Out of a total of R304 million contracts awarded, 34% representing R103 million was spent on BEE companies.

10. 10 VACANCIES T he current vacancy rate is 25,75%(2006/07: 27,41%). If we exclude the newly created posts then it has dropped to 10%. TOTAL VACANCIES: 01 APR 20071,219 New appointments628 Transfers to DLA154 Promotions ( Internal)666 Total Filled1448 Reduce promotions( Internal)666 Total Filled posts782 Added Vacancies Deaths19 Resignations193 Retirements23 Dismissals6 Severance Package27 Transfer out of DLA159 TOTAL ADDED VACANCIES427 TOTAL VACANCIES: 1 APRIL 20081038 REDUCE CREATED POSTS577

11. 11 2008 MTEF Per Programme Programmes2007/082008/09 R’m 2009/10 R’m 2010/11 R’m P1: Administration426 554434 582454 961455 100 P2: Surveys & Mapping98 08588 18995 053100 756 P3: Cadastral Surveys137 937105 334110 868117 520 P4: Restitution3 638 6113 097 3051 648 4651 326 066 P5: Land Reform1 593 4712 888 4693 603 7894 102 016 P6: Spatial Planning22 01832 28634 19436 246 P7: Aux Services11 59313 32114 02514 867 Total5 928 2696 659 3965 961 3556 187 571

12. 12 Medium Term Budgeting Challenges  Major challenges facing the Department with regard to accelerated land delivery Insufficient financial resources –Restitution: R17 billion over the MTEF required to finalised outstanding claims –Redistribution: R70 billion to reach the 30% target High land prices/ Valuation reports Capacity constraints Lack of appropriate funding models Providing training, and technical support to land reform beneficiaries which is critical for sustainable land & agrarian reform Integrated planning

13. 13 Initiatives to address the challenges  Establishment of an integrated Land & Agrarian Reform (LARP)  Increased LRAD and SLAG grants  Strategic Partnerships  Increased capacity through the new structure  Improved performance management  Continuous engagements with the National Treasury

14. 14 Risk Management  Risk management forms an integral part of the total management process of the Department, it is enshrined in the strategic planning processes and the quarterly review management meetings.  The “BARNOWL” risk assessment tool was procured for data management, monitoring and continuous review of the risk register.  Periodical operational performance audits are also conducted by Internal Audit  Risk assessment registers are reviewed annually and aligned to the business processes and operational plans.  Quality assurors have been appointed to conduct due diligence on the section 42 files before approval by the Commissioners.

15. 15 Risk Management cont.  Land Reform uses committees such as the Grants Approval Committees to make informed decisions on land acquisition.  The authenticity of companies is usually checked before a contract is awarded. Other initiatives include the use of Departmental committees such as the Bid Adjudication and Evaluation Committees, the Information Technology Committee and the Transport Committees for decision making.  Departmental policies are approved by the Accounting Officer. Delegations are appropriately cascaded to relevant managers.  Non compliance issues are duly reported and addressed by the Chief Financial Officer and the Accounting Officer.

16. 16 Deeds Registration Trading Account  The Deeds Registration Trading Account is accounted for by the Department as a sub-programme under Programme 7: Auxiliary and associated services.  The main purpose of the Deeds Registration Trading Account is to finance the operating costs of the various Deeds Registries responsible for the registration of conventional bonds, sectional titles and leaseholds.  The main source of funding is fees charged on the registration of deeds and on the sale of deeds information. Shortfalls in the Account, if any, are appropriated from the budget of the Department under Programme 7. Surpluses of the Trading Account are surrendered to the National Revenue Fund, however, for this year the funds are going to be retained for the Cadastre reform project. 2007/08 R’000 2006/07 R’000 Revenue418,989423,477 Other Income13,27714,819 Expenditure(340,354)(319,082) Surplus91,912119,214

17. 17 I THANK YOU